It still remains “fully committed to leveraging on its expertise and resources to help the company navigate through its current challenges and rehabilitate the group’s business”
THE substantial shareholder of Cordlife has called off plans to buy over the remaining shares of the embattled cord-blood bank.
In a bourse filing on Monday (Aug 26), Cordlife said that it received a seventh letter from SAC Capital – on behalf of Nanjing Xinjiekou – that the shareholder is discontinuing pursuing a potential offer as the current circumstances may present risks that are not aligned with its investment criteria and business strategy.
However, Nanjing Xinjiekou, which owns a 20.3 per cent stake in Cordlife as at Mar 20, 2023, remains “fully committed to leveraging on its expertise and resources to help the company navigate through its current challenges and rehabilitate the group’s business”.
The seventh letter from SAC Capital comes after several earlier letters indicated that Nanjing Xinjiekou was still interested in a deal to buy over Cordlife’s shares it does not own.
The private cord blood bank is currently suspended from collecting or processing new cord blood, with the latest directive by the Ministry of Health (MOH) extending the suspension by up to three months from Jun 15.
Investigations from MOH uncovered lapses in the company, where it was found that seven of its 22 storage tanks were exposed to temperatures above acceptable limits at different periods since November 2020.
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The company recently posted a net loss of S$12.4 million in its latest earnings, largely due to the suspension of the group’s Singapore activities.
“The ongoing investigations by MOH, along with the fixed costs being incurred during the suspension of the Singapore operations of the company and its subsidiaries are expected to continue to have a negative financial impact on the group’s Singapore operations, which had been the group’s largest revenue contributor,” said the filing.
Cordlife is also currently embroiled in a shareholder dispute, with two substantial shareholders separately requisitioning to remove directors from its board.
Shares of Cordlife dropped 2.9 per cent or S$0.004, to close at S$0.14 on Monday.
